Why Are MNCs Setting Up Regional Headquarters (RHQs) in Saudi Arabia?

In this article, we discuss the reasons that make Saudi the leading choice for overseas expansion.

According to the latest available data, as of late last year, there were 600 multinational companies (MNCs) with regional headquarters in Saudi Arabia, leveraging the country’s brand as a gateway to regional and global markets.

The figure is only bound to increase as Saudi Arabia confidently strides towards becoming one of the world's top 15 economies by 2030 under its Vision 2030.

The substantial market rise is propelled by the government’s commitment to supporting private sector investments and nurturing a pro-business regulatory environment.

The country’s superior infrastructure, connectivity, and incentives beckon companies intending to expand their international or regional headquarters activities. One notable example is the “Riyadh Headquarters Program,” which comes as part of a series of initiatives undertaken by the Kingdom to draw global firms.

Why is it Strategic to Establish Your Regional Headquarters in Saudi Arabia?

Proximity to Key Global, Regional Markets

One of the most compelling reasons to set up a regional headquarters in Saudi Arabia is itsgeographical proximity to key markets in the MENA region and global markets in Asia, Africa, and Europe. 

Saudi Arabia's central location and abundant natural resources make it a key player in global commerce and trade. As such, setting up a Saudi hub makes it easier for businesses to manage logistics and supply chains across several booming markets and benefit from unparalleled connectivity to the world. This, in turn, helps them improve overall competitiveness and operational resilience.

Realizing the benefits of having a Saudi-based presence, leading players such as Unipart have already been ramping up their footprint in the local logistics space. For Unipart, the Kingdom serves as a bridgehead to other global markets and a compelling environment for its solutions.

Unipart’s Saudi expansion journey was facilitated by AstroLabs, the Gulf’s leading business expansion platform.

Capitalizing on First-Mover Advantage

Establishing an early presence in the Saudi market allows companies to distinguish themselves in such a fast-moving market.

That said, reaping the rewards of being in a high-growth economy is firmly contingent on making long-term investment commitments to the local market.

A regional headquarters opens up direct access to engage with the country’s fast-growing economy, projected to be the second-fastest-growing in 2025.

As Saudi attracts an influx of category-leading companies, there becomes a need to be closer to the market, react quickly to evolving market dynamics, and foster market-centric innovation.

The strategic move to establish a headquarters in Saudi helps businesses centralize their decision-making and resource allocation. This centralization enables them to effectively secure the early mover advantage and position themselves for lasting success.

Access to Once-in-a-Lifetime Opportunities

Saudi’s magnetism as the land of opportunities is getting stronger by the day. The country’s journey towards its vision 2030 is progressing at a rapid pace, with significant milestones either achieved or exceeded.

For the first time, non-oil activities contributed 52% to the real GDP in 2024. Sectors like tourism are witnessing transformative growth; this is reflected in the consistently increasing number of inbound tourists visiting the Kingdom. By the end of 2023, Saudi Arabia had received 106 million tourists, setting the stage for the country to welcome 150 million annually by 2030.

The country’s giga projects, including the Red Sea Project, Qiddiya, ROSHN, and Diriyah, foster a nurturing ground for businesses to thrive, serving as global construction hotspots.

As a result, global companies have their attention focused on having an on-the-ground activation in Saudi. As of December 2024, the country is home to over 521,969 registered businesses. This represents a 60 % increase from the previous year.

Besides, Saudi Arabia’s successful bid for Riyadh Expo 2030 and the 2034 FIFA World Cup cements its status as a global business and investment hub. Expo 2030 alone is projected to generate $7.8 billion in economic output, with Riyadh expecting over 40 million visitors.

Such events act as an incubator for employment creation and an expanding roster of development projects that require global expertise, talent, and capital.

This creates a need for companies to set up a headquarters in Saudi to capture key investment opportunities that promise greater returns.

Global Companies with a Regional Headquarters in Saudi Arabia

Leading players in industries such as IT, finance, technology, logistics, finance, and construction have already chosen Saudi as their regional headquarters.

Attracted by the Kingdom’s robust financial sector and open investment policies, multinational investment banks such as Morgan Stanley and Citi are among the MNCs with Saudi hubs.

Besides financial services, IT is another industry with a high proportion of global enterprise technology firms. That includes Salesforce, the world's #1 AI CRM company, which announced the opening of its RHQs in Riyadh in early 2025. Through its partnership with IBM, Salesforce plans to open a Center of Excellence in Riyadh.

The list also includes PepsiCo and GE Healthcare, Unilever, IHG Hotels & Resorts, Airbus, and Pfizer, along with global consultancies such as PWC and Deloitte.

The rise of HQs in Saudi Arabia is both a cause and consequence of the country’s rapid transformation. The effect is felt significantly across several industries and activities, weaving the threads of Saudi cultural and economic tapestry.

Frequently Asked Questions About Setting Up Regional Headquarters in Saudi Arabia

1. What are the main types of legal entities available for foreign companies setting up a business in Saudi Arabia?

Foreign companies can establish their presence in Saudi Arabia through several structures. These are, but not limited to:

• Limited Liability Company (LLC)
• Branch Office
• Representative Office
• Regional Headquarters (RHQ)

2. What are the minimum capital requirements for setting up a headquarters in Saudi Arabia?

The Ministry of Investment (MISA) offers eight types of business licenses to foreign companies. Each license has its own benefits and capital requirements. More details are here.

3. Are there any restrictions on foreign ownership when establishing a headquarters in Saudi Arabia?

Saudi Arabia now allows 100% foreign ownership in most sectors to boost global investments. This has led to a noticeable increase in commercial registrations, which reached 521,969 in 2024.

4. What are the tax implications for foreign companies establishing headquarters in Saudi Arabia?

Foreign companies should be aware of several tax considerations:

• Corporate Income Tax: 20% on net adjusted profits
• Withholding Tax: Ranging from 5% to 20% depending on the type of payment
• Value Added Tax (VAT): 15%
• Zakat: 2.5% (applicable to Saudi and GCC shareholders)

In fact, special tax incentives may be available for companies establishing Regional Headquarters (RHQ).

5. What are the timeline and costs involved in setting up a headquarters in Saudi Arabia?

Typically, the process can be completed within six months. However, with the help of AstroLabs, it can take less. On average, AstroLabs' clients become operational in three months.

In terms of expenses, depending on the industry, business setup costs for the first year are around SR550,000 or $172,000. This encompasses incorporation fees, recruitment, office spaces, compliance and renewals, and third-party services.